Monday’s data added to the idea that the Federal Reserve is near the end of its interest rate hike cycle. The announcement on Sunday by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, to cut their production targets pushed barrel prices higher.
The dollar initially rose after the announcement. OPEC+ was expected to maintain the 2 million barrels per day (bpd) cuts already in place until the end of 2023, but instead announced noNew production declines of about 1.16 million bpd.
Karl Schamotta, chief market strategist at Corpay, said that following the oil news, markets have turned back to “the deeper disinflationary fundamentals that are likely to drive the outlook for monetary policy.”
“Central banks are believed to remain focused on growth, employment and core inflation measures, which reflect long-delayed energy prices, so the odds for market-implied rate cuts are returning to normal.” levels prior to the cut in production”, added.
Economic reports on Monday showed US manufacturing activity plunged to its lowest level in almost three years in March as new orders continued to contract. The Institute for Supply and Management (ISM) said its manufacturing PMI fell to 46.3 last month, the lowest since May 2020, from 47.7 in February.
The dollar extended its losses after Monday’s data. The euro was up 0.6% at $1.0905, after hitting a one-week low of $1.0788 early in the previous session.
The dollar index, which measures the currency against a basket of six currencies, including the euro, fell 0.9% to 102.01 units. Against the Japanese currency, the dollar was down 0.3% at 132.44 yen, after previously reaching its highest level since around mid-March.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
